Focusing on current investment climate

Senior Equity Analyst at Allan Gray, Tim Acker; Head of product development, Earl van Zyl and Head of the Institutional Client Servicing Team, Grant Pitt. PHOTO: SEITHATI SEMENOKANE.

Growing interest in cryptocurrencies is an indication of how society currently feels about investing. This was highlighted by Senior Equity Analyst at Allan Gray, Tim Acker. Acker was speaking at an investment seminar focused at financial advisors, which was held at Windmill Casino on Tuesday, 15 May 2018.

“The fact that all these people have been attracted to cryptocurrencies tells you something about why we are in this sort of climate where people want to do that. For example, with regards to central banks, a lot of people buy Bitcoin because they think the US government is just printing money which then affects inflation, and this tells you something about people’s motivation as well,” said Acker.

He added that for them as a company, Bitcoin is not an attractive investment. “We’ve actually done quite a bit of research work on it, obviously, number one, we couldn’t invest in it, and even if we could, we wouldn’t, because of the risk return. Even if you thought it was an attractive the risk, it is not appropriate for our company.”

Financial advisors in attendance were also given insights that may inform investments in this changing environment. Head of product development, Earl van Zyl, tackled issues relating to returns being disappointing over the last three years for local investors when compared to longer-term averages and with major equity and bond markets around the world at or near all-time highs, generating future real returns will be more challenging. Van Zyl advised on what the advisors should do if they should be underwhelmed by their portfolios’ performance.

Some advisors were worried about Allan Gray’s investment in energy in Russian especially with its current political stance. Head of the Institutional Client Servicing Team, Grant Pitt, assured advisors that their investment is a relatively small one. “We’ve taken the decision not to increase exposure to Russia, we recycled the shares we had there and allocated it elsewhere into companies which are less volatile,” added Pitt. – Seithati Semenokane